Benefits of Freelancers

Hiring Freelancers? Here are a Few Things You Need to Know

The freelance industry is growing every year, and it is easy to see why people are interested in contract work instead of employment. A study in 2015 showed that approximately 54 million people in the United States are doing freelance work. So, right now is a great time for small business owners to learn more about the benefits of bringing in contract workers instead of employees.

Benefits of Freelance Workers

Why should you hire someone as a freelancer instead of an employee? This option allows you to tap into a larger pool of applicants to get the skills that are needed for your company. Instead of depending on full-time employees in your local area, there are many options to outsource tasks to freelancers in different locations. As a result, quality goes up because you can build a highly specialized team based on the specific services that you need.

Freelancers don’t require the same benefits that are paid to employees. When you bring on a full-time employee, you need to cover costs such as employment taxes, payroll processing fees, office space, equipment, ongoing training, health insurance, paid time off, and other benefits. These expenses add up… you will be paying much more than their base salary!

Many small businesses don’t have the revenue to support these types of expenses yet. So, freelancers can be a good option to minimize ongoing expenses while still getting access to the skills that are needed to support your company.

When a contract is put in place for a freelancer, you can choose the amount of services that are needed. So, you won’t be tied to a part- or full-time schedule. In fact, some business owners find that they only need services for a few hours each week. Instead of taking on the burden of a part-time employee, they can pay a smaller amount to an outsourced service.

Bringing in Help on an As-Needed Basis

One of the biggest benefits of using freelance services is that you can bring in the help when things get busy. As you move into the busy season, it isn’t necessary to hire employees that won’t be needed in a few months. This flexibility allows you to manage the size of your team without letting employees go when things slow down.

Freelancers work on demand, and they come prepared with the skills that are necessary to support your company. You can hire the talent that offers the exact range of skills that you need, helping you avoid expensive training costs that are often associated with onboarding and new employees.

Adjusting the services to match the fluctuations of the season allows you to have the variable cost of invoices, rather than the need to carry heavy overhead expenses of payroll when things are slow. It is common for business needs to suddenly increase or decrease depending on the season. You can’t control the external factors that influence these changes, but you can control the way you manage your staff.

Focusing only on new hires means that you need to think several weeks in advance to plan for advertising, interviewing, hiring, and onboarding. It can be a challenge to keep up with the trends, which means that you might have too many employees at inopportune times. In comparison, freelancers give you the on-demand services when you need them the most.

Motivated and Passionate Workers

Keep in mind that freelancers are business owners themselves, so they often take on responsibility in a different way compared to employees. If a person is motivated to offer freelance services, then they often have the same values as business owners.

As a result, you might see an improvement in the quality of work that is provided and the long-term results that can be achieved. Working with people who are passionate and motivated will have a positive impact on your company in many ways.

Freelancers know that they have to prove their work to stay relevant in your workspace. So, they focus more on the value that is delivered. Many small business owners agree that they can get away from people who are just “punching the clock” when they hire freelancers instead of employees.

The skills provided by freelancers can help you close the gap in services that are needed within your company. If you have employees that don’t bring the right skill set to the table, then you might consider the option to hire freelancers that offer the specific skills that are needed. This process creates a win-win situation: you win because of the affordable access to top-notch skills, and the freelancer wins because they are in more control of their work schedule.

Setting Expectations with Your Freelancers

Since these workers won’t be located in your office, it is hard for business owners to oversee the tasks that are completed. If the freelancer is paid by the hour, then it is important that you set specific expectations for the time when they are on the clock. Some freelancing marketplaces provide opportunities to do a screen capture during the work time so that the client can view the things that are completed by the employee.

Another option is to pay freelancers by the project. Instead of tracking time, your contract workers receive flat-fee compensation based on performance. These payment structures should be arranged in advance. Make sure that the details are confirmed in writing so that everyone has the same understanding for the project.

Onboarding can be a challenge, and there are times when details might fall through the cracks if you don’t have a system in place. If you are planning to hire a lot of freelancers, then it is important that you set guidelines to follow when someone is starting with the company. Proactively planning a good onboarding strategy for freelancers is the best way to increase the opportunity for success for everyone who is working on the team.

Payments and Taxes for Contract Workers

Technically, freelance workers aren’t employees. But, you are still required by the IRS to keep track of their income and report the totals each year. Employees need to fill out W4 forms, and then tax withholdings are calculated in with payroll. In comparison, you are not responsible for these withholdings or tax payments for contractors.

Freelancers should provide you with a W9 when the work commences. Then, you provide a 1099 each year detailing the amount of money that was paid. A copy of this 1099 also needs to be provided to the IRS.

Most freelancers prefer digital payments if they are working remotely. Since they aren’t located in your office, it can be a hassle to stop by to pick up a check. Consider offering payment option through direct deposit, Paypal, Venmo, or any other popular platform. If you prefer to cut a check, then you might be able to make arrangements to send the payment via mail.

Be sure that you have clear payment terms in place with the contractors. For example, many contractors will send an invoice once a month for the services that are delivered. Then, you have a certain amount of time to provide payment. Freelancers expect timely payments. Just because they aren’t on the payroll, doesn’t mean that the freelancer wants to float your debt.

Accounting Help for Freelancers

Some small business owners are hesitant to bring on freelancers because of the extra paperwork that is needed for tax forms. But, don’t let these tax forms stop you from accessing the skills and services that you need! A good accounting and bookkeeping system can be used to streamline your payments for both employees and freelancers.

The easiest solution is to find the freelancers that can support your company. Then, have an experienced accounting team handle the tax paperwork and monthly payments. When you receive invoices from your freelancers, you can pass the information onto the accounting team. This process makes it possible for you to skip the headache of cutting a check, calculating taxes, and filling out the paperwork that needs to be provided to the IRS.

There is no reason for you to manage these tasks when an accounting team can help! Outsource the busy work so that you can free up your time to focus on employee management, business development, and other activities that will boost the bottom line for your company in the future.

Outsourced Accounting and Bookkeeping Services

There is no doubt that freelancers can be valuable assets for your company, and it can be a smart decision for you to bring in contractors to help. If you decide that these services will be useful for your business, then it is important that you have a good financial team to oversee the time-consuming tasks of dealing with payments and paperwork.

In fact, you can hire an outsourced team to manage these details! Here at Easier Accounting, we offer the expertise that you are looking for to manage the financial details for your small business. We invite you to contact our team when you are ready to for more information about the services that we offer: (888) 620-0770

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